TDS Rules From April 1: In the Union Budget-2025, the government had announced many changes related to tax. In this episode, some changes have been made in the rules of Tax Deducted at Source (TDS).
This change is going to be implemented from April 1, 2025. After this change, people making fixed deposits (FD) are expected to get relief.
Let us tell you that TDS is a tax deducted at source. When the interest received on FD in the bank exceeds a certain limit, then the bank has to deduct TDS. This limit is different for senior citizens and non-senior citizens. It was proposed in the budget to rationalize these limits, so that you do not have to face unnecessary TDS deduction again and again.
New TDS limit for senior citizens
To benefit senior citizens, the government has doubled the TDS threshold on interest income. From April 1, TDS will be deducted by banks only if the total interest income exceeds Rs 1 lakh in a financial year. This means that if the total interest income of a senior citizen remains within this limit, no TDS will be deducted. This rule applies to interest earned from fixed deposits (FDs), recurring deposits (RDs) and other savings instruments.
New TDS limit for common citizens
The limit of TDS on interest income for common citizens has been increased from Rs 40 thousand to Rs 50 thousand. If the total interest income remains within Rs 50 thousand, then no TDS will be deducted. This change has been made with the aim of reducing the tax burden on those who depend on income from FD interest.
TDS on lottery
The government has simplified the TDS rules related to lottery. Earlier, TDS was deducted when the total winnings in a year exceeded Rs 10,000. Now TDS will be deducted only when a transaction exceeds Rs 10,000.
Insurance Commission
Insurers, agents and brokers will now get the benefit of higher TDS threshold. The TDS limit on insurance commission has been increased from Rs 15,000 to Rs 20,000.
Mutual Funds and Shares
Investors investing in mutual funds and shares will now get the benefit of higher exemption limit. The threshold of TDS on dividend income has been increased from Rs 5,000 to Rs 10,000.
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